Tuesday, March 21, 2017

Assessing the GTHA's Housing Market

Four days a week I try to go for a walk in the morning. My route takes me around my neighbourhood and sometimes into nearby neighbourhoods and downtown. I am always surprised to see the number of houses for sale and the rapidity with which they are sold. Recently in Worth Reading I've shared a couple of articles about the housing market, including the banks' roles in inflating prices.

As much as it would nice to blame our hot housing market on the banks I think it is a far more complex picture with many contributing factors. Housing prices in the Greater Toronto Area, and perhaps the Greater Toronto-Hamilton Area have been on a steady increase now for decades. Things are hardly uniform across this vast region. Housing prices in Thorold are not growing at the same pace of inner Toronto, but they are all related.

I first started to notice the housing prices spiking around the time of the American financial crisis in 2007-2008. With the global economy in a tailspin Canada became a safe investment spot. As a safe harbour money poured into the Canadian economy, especially in the real estate sector. Foreign investors, like Canadians, are eager to pitch their savings into real estate investments. This ranges from maintaining and fixing up a house to improve its worth, or buying the house in the first place, or speculating in the market. For a huge proportion of Canadians use their homes as their retirement funds and nest eggs. Distortions in the housing market therefore has a tremendous impact on our economy and lives.

I've spent a lot of time wondering if we are in a housing bubble. Lately I have come to the conclusion that we are not in a bubble, but a hot market under a lot of pressure. Some of this comes natural supply and demand issues. The GTHA adds, if I recall correctly, 200000 new residents every year. That's a new Brampton every three years, a new Toronto every ten. This creates a tremendous amount of demand on the market. There are thousands of people across the GTHA interested in acquiring a home and coupled with the investment opportunity real estate presents in this region the demand remains high.

On the other side is supply. Much of the cheap land has already been gobbled up by real estate development. In the next couple of years Brampton will build its last house, Mississauga is essentially fully developed at this stage. York Region is straining to keep pace with the development. Legislation such as the Green Belt and development restrictions is hindering growth in other places but the simple truth is the GTHA is likely falling well short of the demand in housing, especially where it is demanded. The city of Toronto must extensively rezone the city to encourage mixed medium development, but encounters significant resistance. It is a time consuming process. Add in the time for planning, financing and construction and it is easy to see why supply is constrained.

Supply is also constrained due to the foolish decisions made by suburban governments decades previous. Some areas of the GTHA are difficult to redevelop and increase density, even if zoning permitted it. The street grid and neighbourhood configuration would have to be completely changed to accommodate medium or high density.

Then there are more social causes for the rising prices and other issues. Homeowners reasonably expect a good return on investment for their properties. As long as they are not financially compelled to sell they can patiently wait for the higher price. The house down the street sold for $350000, perhaps I can sell mine for $400000. Ten years late the number is creeping up to $600000. Retirees or families need to get a return on their properties so they can afford a new property somewhere else.

This hot housing market will only correct under a few conditions. One, supply increases. Somehow we get more housing on the market or socially change the way we view housing, i.e. include more roommates for long-term investments. Two, demand decreases, which is highly unlikely given basic population trends. However, I will say that as the Baby Boomers retire there could be significant disruption in the housing market if there isn't a smooth transition. Three, the price overshoots the ability for the market to bear. If a house goes up for sale and no one is willing to pay the price it will inevitably begin to fall down which, on a broad enough scale will begin to deflate prices.

Everyone is tied to the housing market in some way because we all need places to live. I think it will be increasingly important for residents of the GTHA to be aware of the shifts occurring in their area and across the region and be prepared to respond to them.

Thursday, March 16, 2017

Worth Reading - March 16, 2017

I would encourage all my readers to read this long summary of the conflict and outrageous actions taken by the government during the Qalipu membership dispute

The Bramptonist takes a look at a couple of potential sites for a university.

From the Toronto Star, the accidental takedown of Tom Mulcair

Andrew Coyne writes on polls leading politics

Doug Saunders asks what if the European elections aren't about racist populism? 

CBC reports on the dismal state of millennial economic life

How have our banks inflated our housing market

Tuesday, March 14, 2017

Government-Approved Identity: My First Nations Status

I wanted to write about something else, but this has occupied my mind lately.

Many years ago my family members began the process to join the Qalipu band and be recognized as Mi'kmaq. As I understand it a family member in Newfoundland saw a notice in the post office asking for people to submit if they were descended from recognized Mi'kmaq in the area. One of the names on the list was Webb. My great-grandfather was Mi'kmaq.

It took months for my family to submit all the paperwork and trace our lineage in documentation for approval. Sometime around 2008 we received notification that our application was approved.

While I've never thought of it to a great degree before now but the formal recognition caused a significant change in my personal identity. During most of my life my identity and that of my family was somewhat in question. Newfoundland family trees are notoriously unclear as birth records were kept by parishes for many years before the government. Once elders in your family pass away knowledge is easily loss of what your family tree is. The work in to clearly establishing our heritage answered questions and filled in missing pieces from our past.

I was in university at the time. As my family investigated our past I found myself increasingly drawn to Aboriginal history. While I would argue that learning Indigenous history is valuable in and of itself I felt it gave me greater historical perspective. In particular I found myself drawn time and time again to the relationship between the government and Aboriginal people. This culminated in pursuing a Master's degree in Aboriginal history. This later parlayed into my time in the Northwest Territories. The Dene and Mi'kmaq are not terribly similar cultures, but I did my best to engage with the local culture in a meaningful way.

My First Nations status has never been about benefits for me. I do not use it to avoid sales tax. I did not get free post-secondary education. I would reckon that my financial life has not substantially changed before and after my family and I were recognized. I enjoy it because I can take meaningful ownership of my heritage.

Last month my family and I received letters stating that the Minister of Indigenous and Northern Affairs and  would be revoking our status. According to the letter my qualification was primarily being challenged because my family no longer lived in Newfoundland. Given the bizarre point system my father may be able to launch an appeal, but my sister and I are likely unable to be reconsidered.

This decision feels like a terrible betrayal. It is as though something is being stolen from me. I am aware that no government decision can take away my heritage, but it does remove the legitimacy especially when Indigenous Canadians have their heritage regulated by government edicts. I plan to write my Member of Parliament in protest, but regardless I am afraid that my status will be lost.

Edit: I wanted to add in a comment by my cousin that I think nicely summarizes those feelings of many in my family:
... since getting our letters in early February, that told us, after 8 years of having been approved to be a member of the Qualipu Band that we no longer "meet the criteria". Indeed, it feels like a betrayal. I was, effectively denied my heritage for the first 35 years of my life - due in part by a Government that didn't even know there were Indians in Newfoundland and a stigma so bad that my grandmother hid her Indian heritage. I will appeal, but I suspect, as does my cousin, that it will be in vain.

Thursday, March 9, 2017

Worth Reading - March 9, 2017

Strong Towns is talking about how to apply their strength test to your own home town. Perhaps I'll apply this to Brampton.

As a person who needs quiet to think, the open office concept is troubling to me. This piece from the Washington Post challenges its growing hegemony

Robyn Doolittle's Unfounded series explores how sexual assaults are reported and (not) investigated in this country. 

Daniel Herriges writes how inner city freeways have repeatedly failed their communities

Brampton Transit will be experimenting with battery-electric buses

Sophie Gregoire-Trudeau caused a bit of a stir when her International Women's Day post on social media called on women to celebrate their male allies

The Huffington Post reports that Canada and China are sending warning signals about the economy.

A sad reality of my nerdy life

Tuesday, March 7, 2017

Book Review: All the King's Men by Robert Penn Warren

All the King's Men is an American classic. First published in 1946 the novel details the life of Jack Burden and his relationship with the meteoric politician, Willie Stark. Set in the 1930s American South the novel is a non-linear retelling of Burden's life, from his boyhood growing up in Burden's Landing to his first meeting with Stark and the conclusion of their relationship. While definitively a piece of political fiction the story, like most political stories, is about the personal relationships of the people at the heart of the drama. Warren's small cast are all connected to one another and their actions damage and ricochet ending in unexpected outcomes.

Given the non-linear nature of the story any sort of summary is difficult, but I will do my best. Jack Burden is a capable but idle man, born of privilege but without ambition. He has wiled away his youth and in college spent some time studying history and the law before dropping out. He worked odd jobs in journalism and politics finding not much satisfaction in either. A cynical, weary Burden meets Willie Stark, then a minor official from a poor, backcountry county.

William Stark enters the story as a teetotaling, straight-edged minor figure. He seeks bond money to build a new school for the county and works hard to keep graft out of the process. He fails and the contract is awarded to a construction outfit with poor performance. The school collapses and Stark is hailed as a hero for warning the community of the problem. Years later Stark's notoriety is parlayed by the rival political machines to turn him into a dummy candidate to steal votes away from a rival. Burden reveals the nature of the scam to Stark, he gets roaring drunk and delivers a firebrand populist speech to the waiting crowd, far different from his normal dull, policy wonk lectures. Stark uses his leverage to sway the election to his opponent and when  he fails successfully runs for the governorship himself. Jack Burden is by his side for the journey.

Most associate Willie Stark as an interpretation of Huey Long and the unnamed state as Louisiana. Stark is a cynical populist with a left-wing agenda. Given Stark and Huey Long's reputation I expected to hate Willie when I began with the book, but I found myself incredibly sympathetic to his point of view. Perhaps that is the nature of the opposition to Stark. Warren doesn't criticize Stark through liberal characters, but instead those with a vested interests to maintain the status quo. Jack Burden is a man of privilege and his family and friends find Stark's rough demeanour and treatment of business and the upper-class deplorable. I cannot help but think that many modern leftist readers would end up feeling great sympathy for Stark who in my eyes transformed from assumed villain to tragic hero brought down by his own flaws.

Politics is about relationships and the dynamics between a small group of people. This is ultimately what destroys Willie and, to a lesser extent, Jack Burden. I appreciate that the novel showed how intimately all these people were connected to one another. Another aspect of the story is reconciling one's past. Burden's central mission in the first half of the novel is to investigate the past of a family friend and mentor, Judge Irwin. In the process he explores his own past, his mother's, and Stark's. The theme of the burden of the past is ever-present in the story. Secrets, betrayals and decisions haunt people on and on forever and return as ghosts to those it impacts indirectly.

Reading this novel in 2017 raised some interesting questions. It was a very different form of populism than we are currently used to. At the same time, Stark's strong-arm political methods are becoming increasingly familiar. In light of recent events it is perhaps worthwhile to explore this novel now if you have not already. Regardless it offers a fascinating snapshot into America's past and politics. 

Thursday, March 2, 2017

Worth Reading - March 2, 2017

A great story from the South Slave about grocery stores putting labels in local indigenous languages in the grocery stores

Kurzgesagt put out a video about artificial intelligence and robot rights

Shawn Micallef in the Toronto Star writes about Preston Manning and populism in Canadian politics

Kady O'Malley writes that there is little evidence of Trumpism in the Canadian conservative Manning Conference. 

Andrew Coyne takes the opposite point of view. He argues that the Manning Conference offered toxic options that would condemn the Conservatives

A brief CBC story on climate change in the Northwest Territories. 

Andrew Coyne offers a scathing criticism of Kevin O'Leary and the Conservative Party that has embraced him. 

Strong Towns' Strongest Town Contest is underway. It's open to international submissions this year. Someone nominated Brampton, and Guelph. Voting is open.

Speaking of Brampton, the Prime Minister made a whirlwind visit to the city this week

We are only about a year away from the next provincial election. Andrea Horwath, leader of the Ontario NDP, recently shared her thoughts on improving life in Toronto in the Star.